LLQP Ethics & Professional Practice · Component 1.6 · 60% of the exam
The 'assignment of benefits' at claim time means:
- ANothing in practice, since benefits can be paid only to the person named in the contract
- BThe insurer chooses the payee based on who has the greatest need for the money
- CThe beneficiary can name someone else to receive the proceeds, which then pass outside the beneficiary's estate and are protected from creditors
- A claimant may direct payment, such as health benefits to a provider or death benefits to a funeral home, as the insurer permits
Correct answer: D) A claimant may direct payment, such as health benefits to a provider or death benefits to a funeral home, as the insurer permits
Funeral home assignments are common; the beneficiary signs an assignment of a portion of the proceeds.
Why the other options are wrong
- AAssignment of benefits is a real practice.
- BThe beneficiary directs within limits; the insurer does not choose.
- COnly through assignment mechanisms the insurer allows.
Exam tip
Funeral assignments: beneficiary assigns part of proceeds to the funeral home.
Common mistake
Assuming a funeral home can claim directly without the beneficiary's assignment.
What this tests
CISRO competency component 1.6 — Integrate into practice the legal aspects of insurance and annuity contracts — which is weighted at 60% of the Ethics & Professional Practice module. Written against the published curriculum.
More from component 1
- An 'assignee' of a life insurance policy is:
- A corporation as policyowner and beneficiary of a policy on a key employee:
- A 'trustee' named to receive proceeds on behalf of a beneficiary:
- The 'automatic premium loan' (APL) provision:
- A life insurance contract 'matures' when:
- The 'assignment' provision typically states that:
Practice the whole Ethics & Professional Practice module
Timed sets weighted like the exam, and review of every question you miss. Free to start.